Correlation Between New Residential and MIE HOLDINGS
Can any of the company-specific risk be diversified away by investing in both New Residential and MIE HOLDINGS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining New Residential and MIE HOLDINGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Residential Investment and MIE HOLDINGS, you can compare the effects of market volatilities on New Residential and MIE HOLDINGS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in New Residential with a short position of MIE HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and MIE HOLDINGS.
Diversification Opportunities for New Residential and MIE HOLDINGS
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between New and MIE is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and MIE HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIE HOLDINGS and New Residential is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on New Residential Investment are associated (or correlated) with MIE HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIE HOLDINGS has no effect on the direction of New Residential i.e., New Residential and MIE HOLDINGS go up and down completely randomly.
Pair Corralation between New Residential and MIE HOLDINGS
Assuming the 90 days trading horizon New Residential is expected to generate 42.67 times less return on investment than MIE HOLDINGS. But when comparing it to its historical volatility, New Residential Investment is 51.98 times less risky than MIE HOLDINGS. It trades about 0.08 of its potential returns per unit of risk. MIE HOLDINGS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.05 in MIE HOLDINGS on October 7, 2024 and sell it today you would earn a total of 0.00 from holding MIE HOLDINGS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Residential Investment vs. MIE HOLDINGS
Performance |
| Timeline |
| New Residential Inve |
| MIE HOLDINGS |
New Residential and MIE HOLDINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and MIE HOLDINGS
The main advantage of trading using opposite New Residential and MIE HOLDINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, MIE HOLDINGS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in MIE HOLDINGS will offset losses from the drop in MIE HOLDINGS's long position.| New Residential vs. CeoTronics AG | New Residential vs. Sims Metal Management | New Residential vs. FORMPIPE SOFTWARE AB | New Residential vs. Take Two Interactive Software |
| MIE HOLDINGS vs. X FAB Silicon Foundries | MIE HOLDINGS vs. KENEDIX OFFICE INV | MIE HOLDINGS vs. OFFICE DEPOT | MIE HOLDINGS vs. Corporate Office Properties |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Commodity Directory Find actively traded commodities issued by global exchanges |